One51's Philip Lynch: considering liquidity event

ONE51, the investment group run by Philip Lynch, will announce better-than-expected earnings and is targeting a significant reduction in its debt this year.

The group, which controls a range of investments from waste management businesses to the Irish Pride bakery and a stake in Irish Continental Group, will tell shareholders in the coming days that first-half earnings will show an improvement on last year and ahead of what the company had previously forecast.

The company, which had net debt of €163.9m at the end of 2009, may see borrowings fall to around €140m by the end of the year.

One51 will also tell shareholders at its annual general meeting this month that it is still considering a "liquidity event". This could involve a dividend payment, a share buyback or a listing of its waste and environmental services division.

The company is under pressure from Gerry Killen, a former executive, who is pressing for changes in the group's strategy and greater transparency. Killen claims to have the support of at least 20% of the company's investors. Killen last week sent a list of detailed questions to the One51 board seeking more information on the company's accounts and payments to subsidiaries. He also wants One51 to dispose of its holdings in NTR, ICG, Irish Pride and a number of other investments. He will this week announce a number of high profile businesspeople whom he wants elected to the board.

Sources familiar with One51 said the company is satisfied with its current strategy and expressed doubts that Killen will attract sufficient support for his plans. One51's largest shareholders are a number of co-ops that have had extensive relationships with Lynch from his days running food group IAWS.